FTC Amends Safeguard Rule

On October 27, 2023, the Federal Trade Commission (FTC) further tightened requirements to safeguard customers' financial information in the hands of financial institutions, with their release of a new amendment (Amendment) to the applicable Standard for Safeguarding Customer Information. The Amendment now requires financial institutions, including nonbanking financial institutions, to report data security breach incidents to the FTC. Here are key takeaways from the Amendment:

• Financial institutions, which include nonbanking financial institutions such as mortgage brokers, payday lenders, and automobile dealers, must now notify the FTC immediately and not later than 30 days after discovery of any security breach involving the unauthorized acquisition of unencrypted information of at least 500 consumers.